After The Close - The stock market got off to a lackluster start this morning, and was unable to find much direction in the afternoon. Traders likely spent the day looking closely at the latest corporate earnings announcements, while also keeping an eye on developments in Washington. Of note, the Trump Administration revealed that it would unveil a tax reform plan shortly. However, limited details were provided. At the close of trading, the Dow Jones Industrial Average was down 31 points; the S&P 500 was off seven points; and the NASDAQ was lower by six points. Market breadth was slightly negative, with declining issues outpacing advancers by a narrow margin on the NYSE. From a sector perspective, weakness was found in the healthcare and financial issues, while some strength was seen in the defensive utility names.

Meanwhile, traders received only one notable economic report today. Specifically, existing home sales rose to an annualized rate of 5.71 million units in the month of March. This showing was higher than analysts had expected, and was also a bit better than the figure posted in April. Continued strength in the housing market is encouraging to see, as this area of the economy is quite sizable. Hopefully, the real estate markets will hold up well going forward, especially if the Federal Reserve chooses to tighten monetary policy again and mortgage rates move higher.

In the corporate arena, we again heard from a few widely held names. Specifically, shares of Visa (V - Free Visa Stock Report) edged up slightly today, but ended flat, after the financial giant delivered favorable results late yesterday afternoon. Shares of General Electric (GE - Free GE Stock Report) slumped, as investors were not overly impressed with the conglomerate’s latest report.

Technically, at the start of March, the stock market pulled back, and has remained selectively weaker since. It is not clear if the first-quarter earnings season will be favorable enough to propel stocks much higher, especially with the market already trading at elevated multiples. Further, the month of May will soon be approaching, and (if the adage is true) some traders may be inclined to lighten up for the summer months.   - Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


12:10 PM EDT - The major U.S. indexes traded in a tight band early on Friday morning, before concerns stemming from geopolitical developments dragged the averages lower. The mid-morning selling effectively offset what has so far been a largely positive quarterly earnings season. Specifically, the upcoming first round of elections in France is being closely watched. A terrorist attack in Paris this week has added further doubt over the outcome there. Additionally, though recent tension with North Korea has abated, it underscores looming uncertainty over the United States’ foreign policy on that continent going forward. By the time the midday hour arrived, overall positivity from Corporate America’s quarterly check-in encouraged the bulls to make another push, and market breadth showed an even distribution of advancing and declining issues.

On the earnings front, Verizon (VZ Free Verizon Stock Report) shares are one of the biggest laggards on the Dow Jones Industrial Average. But Visa (V - Free Visa Stock Report) is trading higher after positive results, while General Electric (GE Free GE Stock Report) stock has struggled mightily today as a sales decline in its oil and gas business evidently weighs on investors’ minds. The blue chip grouping rallied into positive territory as the noon hour approached in New York. So far, more-than three-quarters of reporting corporations listed on the S&P 500 have beaten earnings estimates, while two-thirds have eclipsed their sales forecast.

Moreover, a positive update from the business beat helped to bolster the bull’s case today. The National Association of Realtors reported a 4.4% climb in existing home sales for the month of March. This significantly outpaced consensus expectations, which called for a more-modest 2.5% increase.  Home sales are now at a ten-year high, which further reveals that demand in the housing market remains strong.

Oil, meanwhile, remains on track for its biggest weekly decline in the past month. Domestic stockpile levels continue to rise, while recent reports from OPEC indicate that the likelihood for an extension to its successful drilling limits is less certain than initially thought. Accordingly, U.S. crude is down over $1.00 per-barrel this morning.

Looking forward, despite the see-saw trading this morning, each of the three main equity groupings is on pace for decent weekly gains. Earnings will continue to be the main story in the coming few weeks, but foreign and political headwinds will likely keep the prospects of a widespread rally in check. – Robert Harrington

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


Before The Bell - Following a mostly higher, but still somewhat choppy, first three trading days of the week, which had been heavily influenced by the rising tide of largely supportive results from Corporate America, the stock market started out the penultimate session of the week nicely to the upside, and then took it from there, ultimately fashioning a wire-to-wire win for the bulls. The latest gain in the market saw the Dow Jones Industrial Average push gradually higher over the course of the morning, finally gaining a morning-best increase of more than 150 points by noon on the East Coast.

As before during the week, the gains were largely on the back of supportive earnings metrics. And the gains continued to come, with the Dow's advancing passing the 200-point mark by mid-afternoon, pushing that composite back above 20,600. Meanwhile, the NASDAQ was doing even better on a percentage basis, cracking the 1% gain marker, while the small-cap Russell 2000 was ahead by better than 1.1%, thereby modestly leading the way forward. It seems as though at least for one day, the vexing international issues were moving into the background.      

To be sure, earnings have been relatively supportive thus far, save for a few major misses and/or disappointments. And yesterday was no exception. However, there was another reason for the intensifying rally late in the session. To wit, Treasury Secretary Steven Mnuchin said that the Trump Administration was close to a major tax reform package. The market's stirring post-election rally has been due, in part, to optimism that a wholesale revision of the tax code, highlighted by lower rates, would lead to some very aggressive buying of equities.

As to individual contributors, American Express (AXP - Free American Express Stock Report) led the way higher for the blue chip composite, following its release, after the bell on Wednesday, of better-than-expected results. Also, shares of railroad giant CSX Corp (CSX) jumped on better results, as well. That company also said that it expects earnings to be up 25% this year. Meantime, some recent high-profile laggards started to gain back a little ground. Among the losers on the Dow yesterday were shares of Verizon (VZ - Free Verizon Stock Report) on a disappointing profit performance in the latest quarter.   

The market continued to press higher as the afternoon wound down, with the Dow going back and forth at the 200-point gain mark. The rally, meanwhile, was furthered, to a small degree, by a supportive economic issuance yesterday morning, Specifically, some 30 minutes into the trading day, the Conference Board issued data showing that its Leading Economic Indicators series had risen by  0.4% in March, following a 0.5% increase in February, and a 0.6% gain in January. Such metrics would serve to counter fears of a slower rate of economic growth fostered by some uninspiring business issuances of late.

The rally then persisted into the close, with just minor backtracking at the session's conclusion. All told, the Dow ended up ahead by 174 points--just 50 points off of its best levels of the day. The S&P 500 added 18 points, while the Dow was 54 points better. That gain was the best of three in percentage terms. The leader of the session, meantime, was the Russell 2000, which added 1.24%, or 17 points. Just about all of the groups closed higher, save for the utility sector, as investors appear to be growing less risk averse, as stocks climbed back to near record levels.         

Now, a new day dawns, and looking out at the early trends we see that the indexes in Asia were mostly higher in overnight dealings, while in Europe, stocks are thus far mixed on French election jitters. Elsewhere, oil is flat; interest rates on Treasury issues are generally mixed; and our futures are pointing very slightly higher. On the news beat, in addition to earnings, the National Association of Realtors is scheduled to release March figures on existing home sales at 10:00 AM (EDT). A modest increase is the consensus forecast.   - Harvey S. Katz

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.